Officials Press NU To Report Layoffs Since NStar Merger

HARTFORD — — State officials want to know why Northeast Utilities failed to report company layoffs — a requirement, they say, of the agreement governing the utility's recent merger with NStar.

On Monday, Attorney General George Jepsen and Consumer Counsel Elin Swanson Katz asked state regulators to force NU to explain itself.

The question isn't just whether layoffs are occurring, as the two utilities merge and weed out duplication in their systems. Jepsen and Katz, the state's main consumer advocates, want to make sure those cuts are done proportionally in Connecticut and Massachusetts.

When NStar, in Massachusetts, and Northeast Utilities merged this year, they agreed that merger-related job cuts would be distributed proportionally in the two states.

"They are under an obligation to inform us of any layoffs and also explain why the layoffs taken as a whole are proportional in their split," Jepsen said Monday.

Without the layoff notices, state officials have no way of knowing whether the newly merged company is whittling away its Connecticut employment base.

Jepsen and Katz said theMarch merger agreement between Connecticut regulators and NU required the utility to notify state officials of layoffs 30 days in advance, along with evidence that reductions would not disproportionately affect Connecticut employees.

"We want to make sure the gravity of the company still remains in Hartford," Katz said.

In mid-September, the company acknowledged that layoffs had begun and said the number at that time was under 50. It has since declined to discuss layoffs.

Last month,in answer to questions from Connecticut's Public Utilities Regulatory Authority, NU said between the merger and Nov. 8, 398 employees had left the utility, some involuntarily. When PURA asked why the company had not reported layoffs, the utility said it did not have to because layoffs were anticipated as part of the merger.

NU spokesman Al Lara said in a statement Mondaythat the utility disagreed with state officials on their interpretation of the reporting requirement and would file a response with utility regulators.

"The elimination of redundant positions existing in both companies in our corporate functions was expected and is required to achieve efficiencies and savings for our customers as a result of our merger," Lara said.

The merger agreement states: "In the event of a facility closing or layoff of employees in Connecticut, NU shall provide 30 days' notice of such action to the Attorney General, [Office of Consumer Council] and the Authority, including a demonstration of how any such closing or layoffs are consistent with the standards of equity, fairness and proportionality set out in" other parts of the agreement.

"We think that the agreement is very clear on its face," Jepsen said.

"The irony is that giving us accurate information as to coming layoffs is as helpful to them as it is to us," Jepsen said. "When the layoffs occur and complaints come to our office, sometimes the complaints are based on misinformation."

With information from layoff filings, Jepsen said, the complaints can be corrected.

In its reasoning to not file layoff notices, NU said that the notice doesn't apply to layoffs that are part of its merger integration plan. "There has been no unanticipated event that would warrant notification," the utility said.

The attorney general and the consumer counsel are asking regulators to force the company to provide information about the company's layoffs in 10 days and comply with the agreement for future layoffs. PURA can fine companies that fail to comply with its orders.

According to NU's November letter to PURA, of the nearly 400 employees who have left NU since it joined with NStar, 173 were related to the merger. The utility acknowledged it "has had involuntary separations" but did not say how many, and the numbers were not broken down by state.

In its letter, NU said it hired 164 employees from the date of the merger to Sept. 30, calculating that the net change in the number of employees during that period was 155. Numbers since Sept. 30 were not available.

In its original filings with regulators about the merger, NU said that it expected to complete job reductions without layoffs.

"Any reductions in staff to achieve operational cost savings are anticipated to result from normal employee attrition and retirements rather than from broad based layoffs," the filings said.